Financial aid: Learn the alphabet

Feb. 21, 2014

Crawford College Connection Director Margaret Thornton, left, speaks with student Travis Skaggs and his father Don at a 2006 meeting about college options. According to its website, Crawford College Connection is a not-for-profit organization that provides college access services to students and their families in Crawford County. One of 30 such programs in Ohio, it is part of the Ohio College Access Network. / CentralOhio.com file photo

Written by

Margaret Thornton

Crawford College Connection

Do you remember how happy you were as a child to learn the alphabet — that proud day when you could sing the “Alphabet Song” all the way through?

Of course, the alphabet has been a useful tool to you as you have grown older, and odds are you don’t even have to sing the song any more to remember the letters. Well, it’s time to learn a new alphabet, and unfortunately there’s no cute song to help you remember it.

Eventually, however, just as you learned the regular alphabet, you’ll develop a comfort level with FAFSA, SAR, EFC, COA and PIN — important parts of the financial aid alphabet.

Yikes! College is expensive. That’s one thing we know already. Price tags of more than $40,000 a year are scary, yet that’s the cost of many private schools. Even the state schools, long regarded as the cheap choices, have rising prices, and several now cost more than $20,000 dollars per year. That’s the bad news.

If you’ve experienced college sticker shock, here’s the good news. Many colleges are “on sale” — that is, your student is probably not going to pay the sticker price, especially at the private schools. Of course, some students are “full pays.” Those are the ones with weak academic records and wealthy parents. However, students who have participated in music, art or athletics probably will receive some scholarships. That is merit aid.

If your family is truly financially strapped, your student will receive grants, work-study and low-interest loans. Those are forms of need-based aid.

Need-based aid depends on your completing a nifty form called the FAFSA, or Free Application for Federal Student Aid. The FAFSA determines what you are expected to contribute to your child’s education based upon your income and assets. The result is a figure called the EFC, or Expected Family Contribution.

Notice that I didn’t say the “desired family contribution.” The financial aid form calculates what you are able to contribute, not what you want to contribute. You (and the colleges you list on the FAFSA) will receive an SAR, or Student Aid Report. In short, you complete the FAFSA, which results in a SAR, which lists the family’s EFC. Are you with me so far?

Once colleges know the EFC, they will calculate your student’s need. We know what “need” is — our kids need money so they can go to college. Well, colleges define “need” a little differently. Need is the difference between the cost of attending the college (the COA or Cost of Attendance) and what you supposedly can contribute.

For example, if a college costs $25,000 and your Expected Family Contribution (EFC) is $5,000, your student has a need of $20,000. The college will then put together an award letter trying to make up that $20,000. Sometimes they can; sometimes they can’t.

If you student goes to a school that costs only $15,000, you are still expected to fork over $5,000 (EFC) and your student has a need of only $10,000. In other words, your EFC is the same no matter what the school costs, but your student’s need will be greater at the more expensive schools.

Your student will receive a financial award letter (or aid package), which might contain merit aid (scholarships) and need-based aid (grants, work-study and loans). You and your student will then have to decide whether the financial offer is good enough for the student to attend that college.

The FAFSA is essential to receiving any need-based aid. It’s a hard form with nosy questions, but if you don’t fill out the form, your student will not receive need-based aid. It’s that simple. You can complete the FAFSA at www.fafsa.ed.gov or, if you’re computer-challenged, use the paper version of the FAFSA.

Most people opt for the online version because results will come back faster. Also, thanks to a nice little bonus called “skip logic,” depending on how you answer some questions, you might get to skip part of the form. Finally, the online version will help you avoid common mistakes.

If you do plan to file online, be sure to request a PIN, or Personal Identification Number, so you and your student can electronically sign the FAFSA. Both the student and a parent must have a PIN. You can request your PIN by going to www.pin.ed.gov. It takes a few days to get the PIN, so request yours well before it’s time to file the FAFSA. Remember that both the student and one parent need Personal Identification Numbers.

Most of this year’s seniors recently filed the FAFSA: The deadline for completion for many colleges was Feb. 15. Missing deadlines and filing late will decrease a student’s opportunity to receive aid.

In an ideal world, parents have their taxes figured in early February and can file with real numbers. (Remember, you don’t have to file your taxes by then; just have your taxes prepared.)

However, most of us live in the real world where we don’t have our financial lives together by then. Never fear. You can file with estimated figures from the previous year. Yes, that means that you’ll need to make corrections once you have this year’s figures, but making corrections is much better than missing deadlines.

In early February of each year, many local schools and college campuses offer workshops where parents can get help filling out the

FAFSA.

If you’ve heard that middle-class folks often take a hit on the FAFSA and don’t get much aid, that is sometimes true. The very poor will qualify for help. The very rich don’t really need it. The folks in the middle (where most of us live) do sometimes feel discouraged when we see what we are expected to pay for college.

If you think that you have an unusual circumstance that will make it hard for you to pay — for example, you lost your job recently, you’re taking care of a grandparent with Alzheimer’s or you’ve had an unusual medical expense — talk to the college financial aid office and complete a special circumstances form.

An individual college can override the FAFSA results if you truly have a special circumstance, but the college first must have the SAR with the EFC. In other words,

you must complete the FAFSA.

Sometimes, you might feel frustrated, but remember that you don’t have to know everything. Experts will be glad to guide you through the process. And you’ll get better with practice — you have to file the FAFSA every year that your student is in college. So get your PIN to file the FAFSA so that you will get a SAR with an EFC. Learn the financial aid alphabet, and with a little luck, your student will receive an aid package that is A-OK.